The modern welfare state has been criticized on economic and moral grounds from all ends of the political spectrum. Many have argued that the provision of tax-funded services or transfer payments reduces the incentive for workers to seek employment, thereby reducing the need to work, reducing the rewards of work and exacerbating poverty. On the other hand, socialists typically criticize the welfare state as championed by social democrats as an attempt to legitimize and strengthen the capitalist economy system which conflicts with the socialist goal of replacing capitalism with a socialist economic system.
Conservative criticism
People waiting in line for relief checks in the United States during the Great Depression
In his 1912 book The Servile State, Anglo-French poet and social critic Hilaire Belloc, a devout Roman Catholic, argued that capitalism
was inherently unstable, but that attempts to amend its defects through
ever-more burdensome regulation could only lead to the rise of what he
calls the "Servile State". According to Belloc, this servile state
resembles ancient slavery in its reliance on positive law as opposed to custom or economic necessity by themselves. Austrian-born economist Friedrich Hayek mentions Belloc's Servile State favorably in his book The Road to Serfdom. Along with others such as G. K. Chesterton and Eric Gill, Belloc advocated abolishing profit-making banking in favor of credit unions and replacing capitalism with a system they called distributism which they believed would preserve private property and revive the dignity of work exemplified by the small craftsmen and property holder of the Middle Ages.
Some conservatives in the United Kingdom such as James Batholomew and Theodore Dalrymple
claim that the welfare state has produced a generation of dependents
who prefer to remain on assistance and make no real effort to find
employment, even though assistance is officially only available to those
unable to work or who are temporarily unable to find work. The welfare state in the United Kingdom
was created to provide certain people with a basic level of benefits in
order to alleviate poverty, but these conservatives believe that it has
fostered irresponsible and immature attitudes in many of its
recipients.
Some British conservatives such as Conservative Party co-chairman Sayeeda Warsi also criticize the "'something for nothing' culture" of the welfare state, claiming that the high extent of the welfare state "discourages the unemployed from finding jobs". 55% of people in England and 43% of people in Scotland believe that "benefits for unemployed people are too high and discourage them from finding jobs".
According to political scientist Alan Ryan, "[m]odern conservatives
argue that liberalism promises a degree of personal fulfillment that the
welfare state cannot deliver and that attempts to deliver it will
inevitably lead to disillusionment". Additionally, citizens' resentment
of paying taxes to create benefits for others creates "hostility between
more and less favored groups that is wholly at odds with what modern
liberals desire". Ryan also argued:
Moreover, the welfare state must employ an extensive bureaucracy whose members are granted discretionary powers and charged by law to use those powers for the welfare of their clients. This means that classical liberals' concern for the rule of law and the curtailing of arbitrary discretion is ignored: bureaucrats are given resources to disburse to their clients. [...] The liberation the welfare state promises – liberation from anxiety, poverty, and the cramped circumstances of working-class existence – is easily obtained by the educated middle class and is impossible to achieve for most others. There is thus a grave risk of disillusionment with liberalism in general as a result of its failure when it overextends itself. Some writers suppose that the worldwide popularity of conservative governments during the 1980s is explained by this consideration.
Liberal criticism
Advocates of classical liberalism, economic liberalism and neoliberalism such as adherents of the Chicago school of economics like Milton Friedman faulted the New Deal version of social insurance for creating "notches" that perverted economic incentives, with J. Bradford DeLong arguing:
The government, Milton Friedman and others argued, told the poor: make more money and we will take away your free housing, food stamps, and income support. People are rational, Friedman said, so they will not work for long if they get nothing or next to nothing for it. The big difference between the Malthusian conservative critics of social insurance in the early nineteenth century and the Chicago critics of the 1970s is that the Chicago critics had a point: Providing public support to the "worthy" poor, and then removing it when they began to stand on their own feet, poisoned incentives and was unlikely to lead to good outcomes. And so, from 1970 to 2000, a broad coalition of conservatives (who wanted to see the government stop encouraging immorality), centrists (who wanted government money spent effectively), and leftists (who wanted poverty alleviated) removed the "notches" from the social-insurance system. Presidents Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, and even George W. Bush and their supporters created the current system, in which tax rates and eligibility thresholds are not punitive disincentives to enterprise.
Certain American libertarians criticize the welfare state because welfare
programs do not work to reduce poverty, improve education, or improve
health or retirement. According to them, welfare programs also increase
out-of-wedlock births and decrease the incentive to work. Moreover, they
believe welfare programs reduce freedom by reducing the opportunity of
individuals to manage their own lives.
Socialist criticism
A Swedish Sami boy getting oats and beans from the government's food relief program
Critiques of the welfare state and of social welfare
programs have come from various socialists perspectives, ranging from
Marxists to anarchists. In these perspectives, criticism of the welfare
state often goes alongside criticism of the structural issues of capitalism and the inability for social welfare measures to solve fundamental economic issues which Marxists consider inherent to the capitalist mode of production. Initially, social insurance schemes were promoted by liberals and conservatives to appeal to working class voters to undercut the appeal of socialism.
While some socialist parties tolerated social insurance, socialists
often viewed advocacy of such programs as antithetical to their goal of
replacing capitalism with socialism.
Marxian
socialists argue that modern social democratic welfare policies are
unable to solve the fundamental and structural issues of capitalism such
as cyclical fluctuations, exploitation and alienation.
Accordingly, social democratic programs intended to ameliorate the
issues of capitalism—such as unemployment benefits and taxation on
profits—create further contradictions in capitalism by limiting the
efficiency of the capitalist system by reducing incentives for
capitalists to invest in further production. As a result, the welfare
state only serves to legitimize and prolong the exploitative and
contradiction-laden system of capitalism to society's detriment.
Democratic socialists such as the American philosopher and mathematician David Schweickart
contrast social democracy with democratic socialism by defining the
former as an attempt to strengthen the welfare state and the latter as a
political movement seeking to create an alternative to capitalism.
According to Schweickart, the democratic socialist critique of social
democracy is that capitalism can never be sufficiently "humanized" and
any attempt to suppress the economic contradictions of capitalism would
only cause them to emerge elsewhere. For example, attempts to reduce
unemployment too much would result in inflation while too much job
security would erode labor discipline. As socialists, democratic
socialists aim to create an alternative to capitalism. In contrast to social democracy, democratic socialists advocate a post-capitalist economic system based either on market socialism combined with worker self-management, or on some form of participatory-economic planning.
Market socialism
is also critical of and contrasted with social democratic welfare
states. While one common goal of both systems is to achieve greater social and economic equality,
market socialism does so by changes in enterprise ownership and
management whereas social democracy attempts to do so by
government-imposed taxes and subsidies on privately owned enterprises to
finance welfare programs. Franklin Delano Roosevelt III and David Belkin criticize social democracy for maintaining a property-owning capitalist class
which has an active interest in reversing social democratic welfare
policies and a disproportionate amount of power as a class to influence
governmental policy.
Karl Marx famously critiqued the basic institutions of the welfare state in his Address of the Central Committee to the Communist League by warning against the programs advanced by liberal democrats. While Marx proclaimed that the communists had to support the bourgeoisie wherever it acted as a revolutionary, progressive class because "bourgeois liberties had first to be conquered and then criticised",
he specifically argued that measures designed to increase wages,
improve working conditions and provide welfare payments would be used to
dissuade the working class away from socialism and the revolutionary
consciousness he believed was necessary to achieve a socialist economy
and would therefore be a threat to genuine structural changes to
society by making the conditions of workers in capitalism more tolerable
through welfare schemes.
Eduard Bernstein, a reformist social democrat,
was skeptical of the welfare state and social welfare legislation.
While Bernstein viewed it as something helpful for the working class, he
feared that state aid to the poor might sanction a new form of pauperism.
Ultimately, Bernstein believed that any such policies should be of
secondary concern to the main social democratic concern of tackling
capitalism as the source of poverty and inequality.
The most extreme criticism of states and governments is made by anarchists, who advocate for the abolition of all social hierarchies, including the state. Despite the anti-state and anti-market views of social anarchism,
most anarchists ultimately advocate for the strengthening of the
welfare state, arguing that social safety nets are short-term goals for
the working class. According to Noam Chomsky,
"social democrats and anarchists always agreed, fairly generally, on
so-called 'welfare state measures'" and "[a]narchists propose other
measures to deal with these problems, without recourse to state
authority". Some anarchists believe in stopping welfare programs only if it means abolishing both government and capitalism.
